Muskan Traders purchased four machines of 25,000 each on 1st July, 2016. On 30th September, 2017, the
firm sold one of the machine purchased on 1st July, 2016 at a loss of 2,500.The firm sold another machine
on 31st December, 2018 at a profit of 3,750. A new machine was purchased on 30th September, 2019 for
31,250. Prepare Machinery Account for 4 years, if books of account are closed on 31st March each year
and depreciation is charged @ 10% p.a. as per Straight Line Method.
Answers
The balance at the end would be Rs.60932.
GIVEN: Muskan Traders purchased four machines of 25,000 each on 1st July 2016. On 30th September 2017, the firm sold one of the machines purchased on 1st July 2016 at a loss of 2,500. The firm sold another machine on 31st December 2018 at a profit of 3,750. A new machine was purchased on 30th September 2019 for 31,250.
TO FIND: Machinery Account for 4 years
SOLUTION:
As we are given in the question,
Four machines were purchased for Rs.25,000 each.
One of the machinery was sold at a loss of Rs. 2,500.
Another one was sold at a profit of 3,750 the next year.
A new machine was purchased in the year prior.
The Machinery account is attached below.
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Answer:
The final balance would be Rs.60932.
Explanation:
GIVEN: On July 1, 2016, Muskan Traders paid 25,000 for four machines. On September 30, 2017, the company sold one of the machines purchased on July 1, 2016, for a loss of $2,500. On December 31, 2018, the company sold another machine for a profit of $3,750. On September 30, 2019, a new machine was purchased for $31,250.
TO FIND: 4 YEARS OF MACHINERY ACCOUNT
SOLUTION:
As stated in the question,
For Rs.25,000 each, four machines were purchased.
One of the machines was sold at a Rs. 2,500 loss.
The following year, another one was sold for a profit of $3,750.
In the previous year, a new machine was purchased.
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